Economic Concepts Worksheet PAGE \* MERGEFORMAT 1
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Application of Concept from Personal Experience
Reference to Concept in Reading
Scarcity means that people want more of something that is in limited supply. Scarcity requires Choice, decision-makers must choose which choice will suffice and which choice will not.
When we choose more of one thing, scarcity demands that we take less of something else.
Scarcity and choice involves people with unlimited wants. We may have a nice house, big screen TV's, new cars and even a boat but we still want more. We want new ...view middle of the document...
The opportunity cost of traveling is the time I could have spend running my departments. Anytime I make a choice on time, money or anything, the opportunity cost of my choice is the thing I did not choose.
"To get more of one thing, you forgo the opportunity of getting something else. So the cost of that which you get is the value of that which is sacrificed to obtain it" (McConnell & Brue, p. 4).
Law of increasing opportunity cost is when
there is limited resources and more one resource is used then that resource that can produce it becomes less effective. Resources are not equally productive so shifting resources from one use to another increases the opportunity costs.
I try to avoid increasing opportunity cost in my departments. At times I need to pull resources from one department to another to assist on a project but if I pull for example, from customer service to assist in payroll, the knowledge needed for customer service is minimal with little effect on other departments. But if I decided to bring in my payroll department to help out the customer service department, I will have increasing opportunity costs associated with my decision because payroll needs specialized knowledge to perform their tasks.
"The more of a product that is produced, the greater is its opportunity cost ("marginal" being implied)" (McConnell & Brue, p. 27).
Macroeconomics examines the economy as a whole or a collection of specific economic units treated as if they were one unit. If using the analogy of McConnell & Brue, "We examine the sand, rocks, and shells, not the beach" then we could describe macroeconomics as the whole beach to include the sand, rocks, and shells.
I work for a Japanese company which believes that macroeconomics is essential to the business model. Policies may change according to how...